As onion prices near 2-year low, farmers want MSP fixed at Rs 8.5/kg

February 06, 2019 20:10 IST

In the retail markets, fresh onion is sold between Rs 10 and Rs 12 a kg. Now, farmers have to sell onion at a loss of Rs 2-3 per kg if transport cost is included.

With onion prices hovering around their two-year low, farmers across Maharashtra are asking the state government to fix the minimum selling price (MSP) at Rs 8.5 a kg during the current season to make cultivation remunerative.

Despite a small quantity being left from the last season, stored variety of the vegetable supplement is quoted in the range of Rs 1-2 a kg.

This has also pulled down prices of the new variety rabi onions to between Rs 6 and Rs 7 a kg in the wholesale market.

In the retail markets here, fresh onion is sold between Rs 10 and Rs 12 a kg.

Now, farmers have to sell onion at a loss of Rs 2-3 per kg if transport cost is included.

“Farmers are incurring losses consistently as the current price does not even fetch the cost of cultivation.

Farmers with options to switch to other crops would certainly do that next season.

But most farmers in Nashik district of Maharashtra do not enjoy such switch over option due to unfavourable climatic and soil conditions.

Therefore, they would continue with the cultivating onions here.

"But the government of Maharashtra must protect their interests by fixing Rs 8.5 a kg as MSP as derived from various reports of the state agriculture ministry,” said Jaydatta Sitaram Holkar, chairman, Agricultural Produce Market Committee (APMC), Lasalgaon, Asia’s largest spot onion selling market yard.

Instead of fixing the minimum selling price as done in the case of sugar (of Rs 29 a kg) and milk (of Rs 25 a litre), the government of Maharashtra offered Rs 2 a kg subsidy for onion sold between November 1 and December 15.

The subsidy applicable for a maximum of 200 quintals had been extended later by up to December 31, 2018, with a total allocation of Rs 150 crore.

Santosh Chavan, a farmer from onion producing hub Niphad, near Nashik, plans to distribute his land holding to grow other crops like pomegranate and grapes to improve cash flow.

“The subsidy amount of Rs 2 a kg is insufficient to cover our losses,” said Chavan and added, “Onion price was hovering below the cost of cultivation almost throughout the year. Hence, a periodical subsidy for just two months, that is, a paltry sum of Rs 2 a kg makes no sense at all.”

Diliprao Shankarrao Banker, chairman of Pimpalgaon APMC, however, believes that farmers need to receive at least Rs 1-2 per kg above the cost of onion cultivation for sustainable farming.

“If onion price does not move up, then farmers’ loss would keep mounting which would increase their debt level,” he added.

Meanwhile, with little option left, farmers are planning to dump their old season crop in the field to use the produce as fertiliser for the next season.

The plight of Nashik farmers is significant as the state contributes nearly 40 per cent of the onion produced in India.

And, Nashik’s share is 80 per cent of the onion produced in the region.

Overproduction is another problem which farmers are facing, leading to the price fall.

According to the third advanced estimate, the government has estimated India’s total onion output at 22.07 million tonnes for 2017-18 as compared to 21.82 million tonnes in the previous year.

Acreage under onion, however, remained almost the same at 13.15 million hectares for the 2017-18 and 2016-17 seasons.